Staples Inc. Announces Third Quarter 2013 Performance
On November 20, 2013, Staples Inc., Framingham, Mass., announced the results for its third quarter ended November 2, 2013. Total company sales for the third quarter of 2013 were $6.1 billion, a decrease of four percent compared to the third quarter of 2012. Third quarter 2013 total company sales growth was negatively impacted by one percent due to 107 store closures in North America and Europe during the 12 months preceding the third quarter of 2013. The foreign exchange impact from the stronger U.S. dollar also negatively impacted total company sales growth by one percent during the third quarter of 2013.
"It's been a year since we announced our strategic reinvention, and we're evolving our business to meet the changing needs of customers," said Ron Sargent, Staples' chairman and chief executive officer. "We continue to face weak demand for core office supplies, but we're driving growth online and in new categories, while aggressively managing expenses."
Third Quarter 2013 Reinvention Highlights
- Launched the biggest refresh to Staples.com and Staples.ca since 2005
- Added data science expertise and a Silicon Valley presence with the acquisition of Runa
- Increased assortment on Staples.com by nearly 50 percent with the addition of 70,000 products
- Rolled out new collaborative contract selling model in North America
- Achieved 2013 cost reduction goal of $150 million ahead of schedule
- Continued to aggressively reduce expenses and streamline organization in Europe
On a GAAP basis, the company reported third quarter 2013 income from continuing operations of $220 million, or $0.34 per share, compared to a loss of $569 million, or $0.85 per diluted share, achieved in the third quarter of 2012. Excluding the impact of $64 million of pre-tax charges related to employee severance and other associated restructuring activities during the third quarter of 2013, the company reported non-GAAP income from continuing operations of $274 million, or $0.42 per diluted share, compared to third quarter 2012 non-GAAP income of $310 million, or $0.46 per diluted share.
Total company non-GAAP operating income rate declined 82 basis points to 7.05 percent compared to non-GAAP operating income rate of 7.87 percent achieved during the third quarter of 2012. This decline primarily reflects lower product margins, the negative impact of fixed expenses on lower sales, and investments related to the company's strategic initiatives, partially offset by savings related to headcount reductions, reduced marketing expense, and lower equity compensation.